Americas: Nestlé buys DTC healthy prepared meals company

Nestlé USA has acquired a minority interest in Freshly, a provider of direct-to-consumer (DTC) healthy prepared meals, which currently supplies consumers in 28 US states with weekly shipments of meals.

As the lead investor in the US$77 million round of new funding, Nestlé is entering an online prepared meals market that is worth US$10 billion in the US.

The investment by Nestlé will help to fund Freshly’s construction of a new East Coast kitchen and distribution center in 2018, as it prepares to expand to nationwide service.

Headquartered in New York with operations in Phoenix, Freshly was founded in 2015 and currently employs 400, with plans to hire more people over the next 12 months.

“While most food choices are still made in supermarkets, it’s clear that consumers are responding to a growing universe of direct-to-consumer options, made possible through innovation,” says Nestlé USA chairman and CEO Paul Grimwood.

“Nestlé will gain visibility into Freshly’s advanced analytics and its highly effective distribution network and Freshly will benefit from our R&D, nutrition and sourcing expertise.”

Freshly’s 60,000 sq ft facility in Phoenix can ship to approximately 40% of consumers.

Upon completion of a new facility in Savage, Maryland, Nestlé estimates that Freshly will be able to serve about 93% of the US population with prepared meals that can be heated in two-three minutes.

Freshly’s most popular meals include Sicilian-Style Chicken Parm with Broccoli, Steak Peppercorn with Sautéed Carrots and Asparagus and Roasted Turkey with Quinoa Stuffing.

Unlike many other DTC meal companies, Freshly’s subscription-based model offers various meal plans to consumers with a rotating menu that includes gluten-free, paleo, high protein, low carb or veggie-based meals.